A hallmark of a good entrepreneur is being able to come up with new and innovative products, but in these uncertain times, it is sometimes better for entrepreneurs to stick to a tried-and-tested product. This is why Jonathan So and Carlito Macadangdang Jr. decided in 2007 to establish Burger Factory, a "buy one, take one" burger food cart franchise.
The partners were not exactly new to the food cart business, for at that time their company, JC Fran Corp., already had five food-cart brands with more than a hundred outlets. They came up with the idea for the Burger Factory when they were thinking of what other product they could franchise. They wanted an established product that already had a proven track record, and they decided to settle for burgers.
"Until now you could still see Minute Burger and Burger Machine," says So. "This means that they are earning, and with the population growing, I'm sure I could capture a slice of that market."
To test their concept, the partners opened a test branch in Quezon City in August 2007 and another one in November of that same year. They had opened a total of 34 outlets since then.
In an industry where competition is fierce and numerous other companies are offering "buy one, take one" burgers, Burger Factory hopes to make a name for itself based on three major product attributes: quality, value for money, and service.
So explains: "We put a high premium on taste and make sure that the product and franchise aren't compromised. To ensure quality, I even sacrifice some of the profits, but using Chinese thinking, I go for volume."
Burger Factory burgers cost more than the competition in their class, but So says that consumers who try the product don't mind the difference because of Burger Factory's higher quality. "We use 100 percent beef with no extenders in our patties, and our burger's size is comparable to what you can buy in fastfood shops," he says. "And we have monitoring teams that go around every day to make sure that our outlets are clean and that their crew are following procedures."
A combination of affordable price, good product size, cleanliness, and classy presentation has made Burger Factory popular across all social classes, says So. This makes him confident that even with the current financial crisis, the company's sales will pick up rather than slow down. Indeed, he expects that as the financial crisis gets worse, more and more people would go for cheaper burgers than those offered by the higher priced fastfood chains.
So also attributes the success of Burger Factory to the way he and his partner have cultivated their relationship with franchisees. "It's a service-oriented business, and in franchising what's important is the commitment to serve," he explains. He thus makes sure of keeping the lines of communication open between him and his franchisees, and has also established a Web-based customer service.
According to So, the franchisees of Burger Factory come from all walks of life, like OFWs, retirees, and students who are attracted to the company's low franchise cost. The basic franchise package costs only P88,888, while the premium package costs P128,888--almost half the cost of similar franchises--inclusive of initial inventory, training, equipment, and the burger cart.
There is no royalty fee but in its place, the franchisee has to purchase all stock from the JC Fran commissary. So says that the profit margin for the burgers is 40 percent and franchisees can normally get back their initial investment between six months and a year.
To keep costs down, Burger Factory fabricates and prepares everything at the company's commissary, from the carts all the way to the products. The company intends to expand its product line and, to take full advantage of JC Fran's multiple brands, plans to open mini-restaurants offering the various JC Fran food products.
JC Franchising Corp.
1196 Batangas St., San Isidro, Makati City
Telefax: (02) 889-4772; (02) 889-4773